Single Tier Pension Deduction

Yorkie27

I have worked in local government from 1969 to 2010 and am due to receive state pension in 2017

My State Pension Forecast under the new state pension rules give me a pension of £48.63 per week with 41 years national insurance contributions. This is down from an estimated maximum of £148.40
This is a whopping deduction.

I will get £117.48 under existing rules.

Can I appeal this?

SeekTruth

First, can I ask how you have obtained a State Pension Forecast under the new rules? The online system is still giving me a forecast based on the current (old) rules.

With regard to what you will get, I assume the forecast has given you two figures, one based on current rules (£117.48) and one based on new rules (£48.63). Your Foundation Amount (the starting point for your entitlement as at 6 April 2016) will be the greater of these two figures, namely £117.48. This is just the current estimate, it will change due to inflation increases and possibly due to changes in your NI record before April 2016. Depending upon when in 2017 you reach State Pension Age you may also have a further year of NI contributions paid or credited after April 2016 and this will increase your State Pension from the estimated £117.48 figure by approximately £4.

I'm not sure where the figure of £148.40 has come from. Is this on the same forecast or from a previous statement?

Incidentally, I'm not surprised by the £48.63 figure. It just demonstrates how large the 'Rebate Derived Amount' can be for someone with a long period of Contracted-Out service.

Yorkie27

Telephone Department of Work and Pensions 0845 300 0168 and they will send you details based on the new scheme. £148.40 is what they are basing calculations on

greenglide

Incidentally, I'm not surprised by the £48.63 figure. It just demonstrates how large the 'Rebate Derived Amount' can be for someone with a long period of Contracted-Out service.

It surprised me initially but on reflection it is supposed to be equivalent to the Contracted Out Deduction and this usually (but not always) reduced the AP to zero.

I have around £45 AP from about half of my working life, the remainder being contracted out so a deduction of £100 seems about right.

I think some people are in for a big surprise when they learn what the deduction will be but to have a deduction this large they would have well over 30 years contributions so would get at least £113 from the old rules calculation.

JohnB47

Yorkie27 wrote: »

Telephone Department of Work and Pensions 0845 300 0168 and they will send you details based on the new scheme. £148.40 is what they are basing calculations on

What did they actually say to you? Did they say 'your pension will be £48.63 per week under the new rules'? If so, we are in for a confusing few months until these people get educated.

JB9302

Similar position to OP , 42 yrs contributions since 1967 - 2009 , got a pension forecast in June of £116.60 pw for Jan 2017 when SP age .
Just written asking for an updated statement as was told to wait till Sept for them to work out the figure after the rebate derived amount applied .
Will update when I get a reply .

greenglide

JohnB47 wrote: »

What did they actually say to you? Did they say 'your pension will be £48.63 per week under the new rules'? If so, we are in for a confusing few months until these people get educated.

No. The forecast would be for £117.48 as this is the higher of the amount A and the amount B calculation.

Yours should be a minimum of £116.60. The rebate amount is only applied to the new rules amount (the £144 amount originally talked about)

JohnB47

greenglide wrote: »

No. The forecast would be for £117.48 as this is the higher of the amount A and the amount B calculation.

Yes, I agree but I was asking what the pensions people actually said. Did they really believe that the £48 figure was the actual pension amount?

Yorkie27

Actual amount to be paid will be £117.
The concern was the massive reduction on the new system

drumtochty

SeekTruth wrote: »

I'm not sure where the figure of £148.40 has come from. Is this on the same forecast or from a previous statement?

It has been stated by the government that the "Flat Rate Pension" will not be lower than the Guaranteed Pension Credit.

For the year 2014 / 2015 that is £148.35 per week for a single person,

Therefore for illustrative purposes the figure of £148.40 is used for the year 2014 / 2015 for the Flat Rate Pension so prior to it being in payment.

The flat rate pension was illustrated at £144 per week in Jan 2013 when the Guaranteed Pension Credit for a single person was £142.70 a week.

To add one more confusing number, at the Tory Party Conference last week, David Camerion advised the Flat Rate Pension would be £142 a week in April 2016.

The actual value of the Flat Rate pension will be set at the Autumn Statement in late November / early December 2015. Starting April 2016.

kidmugsy

drumtochty wrote: »

To add one more confusing number, at the Tory Party Conference last week, David Camerion advised the Flat Rate Pension would be £142 a week in April 2016.

That sounds to me as if one of his political advisers has made a blunder in drafting the speech. It can safely be ignored, I suggest.